SK Hynix Tests Key Gamma Support: Will $135 Hold?
On Friday, $SK hynix(SKHY)$ fell nearly 5%, leading a broad pullback across the memory sector. Investors grew concerned after the company announced plans to expand capital expenditures over the coming years, raising expectations for faster HBM and DRAM supply growth. While the investment supports long-term AI demand, it also fueled concerns that future memory supply could outpace expectations, weighing on pricing and industry profitability. Meanwhile, the AI memory sector had rallied sharply in recent months, prompting some investors to lock in profits.
From the options market's perspective, short-term positioning has turned more cautious, but there are no signs of panic selling. The $135 level remains the market's key support.
$135 Emerges as the Key Battleground
According to the Gamma Exposure profile, $135 is currently the largest Put Wall, while the Gamma Flip sits near $148.
With SK Hynix now trading just above $135, holding this level could help reduce dealer hedging pressure. However, if the stock breaks below $135, negative Gamma dynamics could amplify downside volatility as dealers hedge their exposure.
On the upside, only a move back above $148 would shift the market into a positive Gamma environment, where dealer hedging becomes more supportive and the overall market structure improves.
Investors Are Still Positioning for a Rebound
Despite the sharp pullback, 30-day options activity shows Call and Put trading volumes remain broadly balanced, with a Put/Call Ratio of roughly 1.03, suggesting there has been no meaningful surge in downside hedging.
By strike price, Call activity has been concentrated around $140-$150, while Put volume is clustered around $130-$135. This suggests investors are primarily watching whether the $135 support can hold, while still positioning for a potential rebound rather than broadly betting on further downside.
Long-Term Sentiment Continues to Improve
Another encouraging sign is that total Open Interest has continued to rise, while the overall Put/Call Ratio has steadily declined from around 2.5 to approximately 1.4.
Although Put Open Interest still exceeds Call Open Interest, Call positions have been growing at a faster pace, indicating that long-term sentiment is gradually improving.
From a fundamental perspective, demand for AI servers and HBM memory remains strong, and several sell-side firms maintained bullish ratings following the latest earnings. The market's near-term concerns are centered on the pace of capacity expansion rather than any deterioration in AI-driven memory demand.
Bottom Line
Combining both the fundamentals and the options market, SK Hynix appears to be in a "short-term cautious, long-term constructive" setup.
The two key price levels to watch are:
– $135: The largest Put Wall and the most important near-term support.
– $148: The Gamma Flip, which could mark a shift back toward a more bullish market structure.
If SK Hynix can hold above $135, the market may gradually digest concerns over capacity expansion, giving the stock an opportunity to retest the $148 level. However, a decisive break below $135 could trigger greater volatility as negative Gamma dynamics amplify dealer hedging activity.
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